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Project costs & funding

The total project costs for Civic Place are $162.05 million and borrowings remain at less than $30 million. The project costs include all professional fees, allowances for inflation, and allowances for contingencies, as well as all construction costs. Council will meet these costs by contributing approximately 78% in equity, and 22% ($30 million) in loan borrowings – repayable over 40 years.

An independent review of the Funding Plan was undertaken by PricewaterhouseCoopers in 2004. The review was to:

  • Assess the reasonableness of the key assumptions and Council’s ability to support the financial structure proposed
  • Identify the key risks and mitigation measures
  • Assess Council’s debt capacity
  • Identify options to ensure reasonableness, market attractiveness and appropriate risk/return.

The findings of the PricewaterhouseCoopers review were:

  • The 2002 funding plan in which Council will contribute 85% in equity appears largely in place
  • At the time of the review the project costs appear reasonable
  • Final costs will be dependent on Council’s ability to control costs through project documentation
  • Potential funding variations can be met by identified sources of additional revenue
  • Council’s position is to have required funding in place before each stage of the project is committed
  • The recurrent income stream appears reasonable and if achieved would support the proposed borrowings
  • Estimated operating losses for the cultural facilities appear reasonable based on a high level review, but are sensitive in changes to demand from community, commercial and cultural sectors
  • Council is asset rich, but cash constrained
  • Maximum borrowing for the project would not increase Council’s debt service ratio above the accepted industry benchmark which is 10% of operating revenue
  • Project borrowings are expected to be financed from recurrent income generated from the project
  • Repayments on [additional borrowings] would require an adjustment to Council’s recurrent budget in the absence of an alternate funding source.
  • Annual Audit of Project – PricewaterhouseCoopers
  • Probity on Tenders – Deloitte Touche Tohmatsu